"Retirees Now Frequently Base Their Retirement Decisions on the Portfolio Success Rates Found in Research Such as the Trinity Study.... This Is Not the Information They Need for Making Their Withdrawal Rate Decisions."

"Big Moves Out of Stocks Should Not Be Done at All. But Strategic Asset Allocation Can Be Done At Very Rare Times, Maybe Six Times in an Investor’s Lifetime, Three Times When the Market Is Stupidly High and Three Times When Stupidly Low."

"There Is An Extensive Literature About the Predictability of Long-Term Stock Returns. There Is an Extensive Literature About Short-Term Market Timing. My Question Is About Long-Term Market Timing. The Literature Seems Slim."

"For Years, the Investment Industry Has Tried to Scare Clients Into Staying Fully Invested in the Stock Market at All Times, No Matter How High Stocks Go. It's Hooey. They're Leaving Out More Than Half the Story."

"There Are Time-Periods Where Stocks Are a Terrible Addition to That Portfolio. Yet Inexplicably, We As Planners STILL tend to Suggest That It Is 'Risky' to Not Own Stocks When in Reality the Only Risk Is to Our Business."

"There Is a Growing Behavioral Economics Movement, But It So Far Has Had Limited Impact. Economists Are Not Fond of the Softness and Imprecision of Psychology. These Notions Are Considered Vaguely Unprofessional and Flaky."

"I Was Hooked on the Idea of [Passive] Index Indexing, But Something Inside Made Me Wonder "Too Good to Be True?" and "What's the Downside?" I Happened on to Your Site and Valuation-Informed Indexing Seems to Make Sense."

"Rob's Da Man! Never in the History of the Diehards Forum Has One Poster, Always Making Civil and Well Thought-Out Posts, Managed to Irritate So Many Without Anyone Being Able to Articulate a Good Reason As to Why."

"Rob Bennett: Some People Disagree With Him, and He Rubs a Lot of People the Wrong Way. But He Has Interesting Ideas About Valuation-Informed Indexing, and He Delves Into a Lot of What Makes a Successful Investing Strategy."

"The Return Predictor Is Based upon the Principle that Over the Long Term, Stock Market Prices Will Reflect the Ten-Years Earnings Growth of the Underlying Companies. Prices Return to a Common Growth Pattern."

"You Go About It in a Manner that is Catastrophically Unproductive by Adding Missionary Zeal that Inflates Your Importance and Demeans Others. The Whole Idea That There is a New School of Safe Withdrawal Rates Reeks of Personal Aggrandizement."

“What Warren Buffett Did Was Essentially Quite Close to What Rob Bennett Has Written. Buffett Has in Fact Been Cleverly Incorporating Long-Term Market Timing Based on Valuation of the Market in His Allocation of Money to Stocks.”

"You've Got to Say One Thing for Rob. He Has NEVER Lowered Himself to Ad Hominen Attacks -- Subliminal or Otherwise -- on Any Other Person on This Board. Not Once. Ever. At Least Give Him Credit for That."

"Mr. Bennett, You Are Spot on About Integrating Some Type of Valuation Filter to One's Stock Allocation. Astute Investors Have Incorporated Some Type of 'Valuation Timing' Into Their Investment Decisions Since the Beginning of Time."

"There Is Nothing More Doubtful of Success Than a New System. The Initiator Has the Enmity of All Who Profit By Preservation of the Old Institution and Merely Lukewarm Defenders in Those Who Gain By the New One."

"Difficult Subjects Can Be Explained to the Most Slow-Witted Man If He Has Not Formed Any Idea of Them. But the Simplest Thing Cannot Be Made Clear to the Most Intelligent Man If He Believes He Knows Already What Is Laid Before Him."

"I Certainly Have Seen the Academic Profession Squelching Unfashionable ideas and Have Often Been on the Wrong Side of It. Kuhn Shows How Most Pathbreaking Scientific Ideas Are Rejected at First, Usually for Decades.”

"Rob Bennett Was an Early Pioneer in 3rd Generation Modeling by Advocating (Through Various Online Forums) that Withdrawal Rates Must Be Adjusted for Market Valuations Consistent with Research by Campbell and Shiller."

"Rob Is an Enigma in the Personal Finance World. He Has Interesting Theories on Investing Based on Market Valuations. But He Weaves a Tale Which Makes the Stories of Alexander Litvinenko & Gareth Williams Seem Tame by Comparison."

"I Have Read Everything I Can About Valuation-Informed Indexing. Buy-and-Hold Is Extremely Problematic. I Respect the Passion, Hard Work and Research That You Have Put Into This Very Important Issue. Your Work Has Huge Value."

"The Amount of Return You Can Expect From a Diversified Equity Portfolio Is Inversely Correlated to the Market Valuation at the Start of the Holding Period. It Is One of the Most Robust Statistical Relationships in Modern Finance."

"I've Had Similar Experiences. I Know of Two Young Professors Who Wanted to Do Research on Fundamental Index and Reported to Me That Their Colleagues Advised Them That This Line of Research Could Derail Their Career Prospects."

"As with Drug Studies Funded by Drug Companies, It Would Be Churlish to Suppose that the Chicago School of Business Was in the Bag. But It Would Also Be Idealistic to Assume That There Was No Funding Bias at All."

"This Sort of Intimidation Is Not Acceptable. The Cigarette and Pharmaceutical Industries Found Research Supporting Their Products By Funding It. But That Was Big Money Supporting Outcomes, Not Dissuading Others."

"The Situation [Referring to the Intimidation Tactics Used to Silence Academic Researcher Wade Pfau's Reporting of the Dangers of Buy-and-Hold Investing Strategies] Seems Well Below Any Professional and Academic Acceptable Standards."

"It Is Obvious that Rob, in Attempting to Identify New Safe Withdrawal Rate Strategies...Is Goring Your Ox. If Rob Improves on [the] Safe Withdrawal Rate Methodology, the Implication Is Clear: You Are All, Metaphorically, Out of Business."

"Naturally, I Am Finding That Valuation-Informed Indexing Can Allow You to Reach a Wealth Target With a Lower Saving Rate and to Use a Higher Withdrawal Rate in Retirement Than You Could With a Fixed Allocation."

"A Careful Examination of Past Returns Can Establish Some Probabilities About the Prospective Parameters of Return, Offering Intelligent Investors a Basis for Rational Expectations About Future Returns."

"How Can It Be That One-Year Returns Are So Apparantly Random and Yet Ten-Year Returns Are Mostly Forecastable? In Looking at One-Year Returns, One Sees a Lot of Noise. But Over Longer Time Intervals the Noise Effectively Averages Out and Is Less Important."

"The Notion That Rich Valuations Will Not Be Followed By Sub-Par Long-Term Returns Is a Speculative Idea That Runs Counter to All Historical Evidence. It Is an Iron Law of Finance That Valuations Drive Long-Term Returns."

"It's January and the Temperature Is Below Freezing. If You Asked Me Whether It Will be Warmer or Cooler Next Tuesday, I Would Be Unable to Say. However, If You Asked Me What Temperature to Expect on April 9, I Could Predict "Warmer Than Today" and Almost Surely Be Right."

"If the Response Is "Who Knew?", It Won't Be Much Comfort for Retirees in the Employment Line at Wal-Mart. This is Especially True Since a Rational Understanding of History and the Drivers of Longer-Term Stock Returns Can Help Retirees To Avoid That Surprise."

"New of the Demise of the Random Walk Has Only Very Slowly Spread, In Part Because Its Overthrow Came as a Shock. If the Random Walk Hypothesis Were Correct, the Most Likely Return Would Be the Historic Average Return. The Evidence, However, Is Strongly Against This."

"I Don't Care If You Do or Don't Believe That the Market Will Behave Similarly in the Future As It Has in the Past. Either Way, This [The Stock-Return Predictor] Is an Excellent Way to Understand What the Market Has Done In the Past."

"It Really Is a Shame and Indefensible That So Many Feel the Need to Jump Into It With No Interest of Posting on the Topic But Just to Disrupt. Are You That Insecure? Some on the Forum Have an Interest in This Topic. If You Don't, Stay Out!"

"Irrational Behavior Does Follow Patterns. But How Many Experts in Behavioral Finance Believe That Such Knowledge Can Be Used to Predict Markets? Basically, None. Your Model Cannot Attain the Level of Predictive Value You Claim."

"The Safe Withdrawal Rate Studies Are Based on History. This [The Retirement Risk Evaluator] Shows, Based on the Same History, What the Probabilities Are for the Future at Various Starting Points. If the First Has Value, Then Surely This Does Too."

"There Are Hundreds of People Who Contributed to This. This Calculator [The Stock-Return Predictor] Demonstrates in a Compelling Way the Power of This New Internet Discussion-Board Communications Medium."

"A P/E10 of'26' Is Bad. Now Look at the 30-Year Return Predicted by the Calculator -- 5.4 Percent Real. That's Not Bad. There Are All Sorts of Strategic Implications That Follow From Understanding That Stocks Provide Different Sorts of Returns Over Different Sorts of Time-Periods."

"I Would Never Invest in Anything Without Having Any Idea What the Expected Return Is. For Instance, I Would Not Walk Into a Bank And Say "I'll Take One Certificate of Deposit, Please" WIthout Asking What Rate They Are Offering."

"I've Seen Things Said on Investing Boards That I Have Never Heard Said in Discussions of Any Non-Investing Topic. The Question of Whether Valuations Affect Long-Term Returns Is a Topic That Causes People More Emotional Angst Than Does Abortion or Impeachment Proceedings or the War in Iraq."

"It's Not Possible For Those Who Have Come to Believe That Stocks Are Always Best to Accept that Valuations Matter. The Two Beliefs Are Mutually Exclusive. If Valuations Matter, There Is Obviously Some Valuation Level At Which Stocks Are Not Best. The Two Paradigms Cannot Be Reconciled."

"Dear Rob -- I Just Became Aware of Your Past Research in September. Since Then, I've Read Archives From Many Discussion Boards and Websites, and I Always Find Your Writing to Be Very Interesting and Intriguing."

"I Think Rob Bennett Did Provide An Important Contribution in Terms of Describing a Way for P/E10 to Guide Asset Allocation for Long-Term Conservative Investors. I Also Think He Was Right on the Issue of Safe Withdrawal Rates."

"Because the Precise Timing of This Mean Reversion Is Not Known in Advance, Expecting the Result to Happen in the Short-Term Will Not Be Possible. But Long-Term Investors Who Can Be Patient Can Wait for This Mean Reversion and Will Eventually Come Out Ahead."

"Your Work Is at Odds with the Ethos of the Board -- Here the Theme is John Bogle's Philosophy, Which Eschews Market Timing. This Board Came Into Existence to ESCAPE One Individual, the Very Individual With Whom You Have Openly Aligned Yourself."

"Why Is It Such an Odious Violation of the Tenets of Bogleheadism to Explore Whether Someone Who Has Enough Patience Might Be Able to Benefit from the Transitory Nature of Speculative Returns (the Idea That the P/E Ratio Eventually Ends Up Where It Started)?"

"Let Me Explain Why I Posted About This Here. Valuation-Informed Indexing Has Had Critics for Years. But Until Norbert Did It In 2008, Nobody Seemed to Have Provided a Serious Investigation of It. I Couldn't Understand Why. That Bothered Me."

"If You Really Don't Like Market Timing in Any and All Forms, You May Not See Any Point in an Empirical Investigation. You View Me as One of a Long Line of Hucksters Trying to Sell You Some Snake Oil. I Don't Want to Be Such a Person."

"Having a Completely Ineleastic Demand for Equities Is a Bit Bonkers. No One Acts That Way with Life's Other Important Commodities. Campbell Advocates a Linear Valuations-Based Strategy so That You Wouldn't Be Making Big Changes. This Would Be Like Rebalancing But More Flexible."

"The Whole Idea of Valuation-Informed Indexing Belongs to You. Do You Mind if I call the Paper 'Valuation-Informed Indexing'? I Would Give You Credit. I Have Been Toying With the Idea of Sending the Paper to the Journal of Finance, Which Is the Most Prestigious Journal in Academic Finance."

"I Definitely Need to Cite You as the Founder of Valuation-Informed Indexing, As I Have Not Found Anyone Else Who Can Lay Claim to That. Shiller Pointed Out the Predictive Power of P/E10 But Never Discussed How to Incorporate It Into Asset Allocation, As Far As I Know."

"I Tested a Wide Variety of Assumptions About Asset Allocation, Valuation-Based Decision Rules, Whether the Period Is 10, 20, 30 or 40 Years, and Lump-Sum vs. Dollar-Cost Averaging To Show That the Results Are Quite Robust to Changes In Any of These Assumptions."

"I Wrote Up the Programs to Test Your Valuation-Informed Indexing Strategies Against Buy-and-Hold and I Am Quite Excited. You Say in the RobCast That VII Should Beat Buy-and-Hold About 90 Percent of the Time. I Am Getting Results That Support This."

"Never Underestimate the Power of a Dominant Academic Idea to Choke Off Competing Ideas, and Never Underestimate the Unwillingness of Academics to Change Their Views in the Face of Evidence. They Have Decades of Their Research and Academic Standing to Defend."

"Since They Did Not Diagnose the Disease, There Is Little Popular Confidence That They Know the Cure. What If Economics Is, Actually, At the Same Level as Medicine Was When Doctors Still Believed in the Application of Leeches?"

"I Love the Humans Dearly (the Title of the Book I Am Writing Is Investing for Humans: How to Get What Works on Paper to Work in Real Life) But They Can Be a Trial at Times. Hey! Helping the Humans Learn What It Takes to Invest Effectively Is Not All That Different From Being Married!

"Wow, I Did Not Realize You Had Achieved This Much Success and Had Many Devoted Believers/Followers. That’s Great, Then Ignore the Opposition. It Is Great to Have Opposition: That Means You Are Doing Something Right."

"I Do NOT Believe I Know It All. I Believe That Shiller Discovered Something Very Important and It Appalls Me That More People Are Not Exploring the Implications of His Findings. My Aim Is To Launch a National Debate."

"I LOVE Everything About Buy-and-Hold Other Than the Failure to Encourage Investors to Take Price Into Consideration When Setting Their Stock Allocations. That's a Mistake That Was Made Because Shiller’s Research Was Not Available at the Time The Strategy Was Being Developed."

"Valuation-Informed Indexing Sounds Like a Real Thing. If It Is and I Can Thoroughly Understand It, Then It Will End Up In My Classrooms and in My Students' Minds (Of Course, With References to You and Wade)."

"As a Fan of Thomas Kuhn's The Structure of Scientific Revolutions, I Know That Progress Can Be Frustratingly Slow and What Is Typically Needed Is Either a Crisis or the Ascent of a New Generation of Scientists Who Did Not Build Their Careers on the Old Models and Theories."

"Rob Gets Himself So Worked Up Over What Someone Else Is Doing With Their Own Money and Not Bothering Rob in the Least. As Long As They Aren't Knocking on Your Basement Door, What Do You Care? They Are Happy and Content. Leave Well Enough Alone and Focus on Your Own Account."

"I've Been on Forum Since the BBS Days and I Think Rob is Special. He Could Be an Internet Meme If He Put Some Effort Into It. Someday, He Will Realize That the Only Thing He's Good At Is Being an Epic Loser. He Just Needs to Embrace That Idea and Run With It. Watch Out, LOLCats, Here Comes Pathetic Guy!"

"You Guys [the Greaney Goons] Are the Same Jokers Who Have Done This Before, Sparring with Rob Over Nonsensical Issues On This Site and Others, Leveling Personal Attacks, and You Don't Even Use Real Names! Rob Is Entitled to His Opinion, But the Fact That You Challenge Every Jot and Tittle of What He Says Makes It Clear You Have An Unholy Agenda. Please Take It Elsehwere."

"Rob, Take This As Friendly Advice. You're a Smart and Articulate Guy and You Could Be Making Valuable Contributions to This Discussion. I've Dealt with the Mentally Ill Before and I've Found That They Sometimes Can Be Reasonable If Gently Redirected."

"I’m a Numbers Guy. And I Believe I Understand Rob’s Thesis, that Future Returns, Over the Next Decade, Have a Tight Inverse Correlation to the PE10 for the Starting Point. Remember, Correlation Doesn’t Need to be 100%, Only That There’s a Bell Curve of Potential Outcomes that Shift Meaningfully Based on the Input."

"I Have had Academic Researchers Tell Me That They Dream of the Day When They Will be Able to do Honest Research Once Again. I Have had Investment Advisors Tell me That They Dream of the Day When They Will be Able to Give Honest Investing Advice Again."

"Let’s Call a Spade a Spade, Shall We? Wade Pfau Stole Your Research and Put His Name on it, Throwing You Just a Tiny Crumb of Acknowledgement to Ward Off a Lawsuit. He’s Profiting Handsomely By His Theft, Leading a Charmed Life, Widely Published, Widely Respected. While Rob Bennett Continues to Toil in Total Obscurity. It’s So Incredibly Unfair, I Think If It Happened to Me, It Could Actually Drive Me Insane."

Dogma Is the Enemy of the Middle-Class Investor

Juicy Excerpt: Perhaps I’m wrong. If so, I’d like to find that out. Or perhaps I’m right. Either way, what’s needed today is a national debate on the merits and flaws of the conventional investing wisdom.

A rockin’ comments section on this one.

Juicy Excerpt: Does it make sense to pay attention to how much you’re paying for something? Of course it does. There is no question that a share of the stock market purchased now is going to earn a greater return than a share purchased last summer. That said, I disagree pretty strongly with blaming market bubbles on passive investors.

Comments

I don’t think that’s right, Drip Guy. I view your question as the product of black-and-white thinking. It comes from a cartoonish perspective. The question evidences goonishness.

But it certainly is so that I put more focus on process than on substance. There’s lot of evidence of that in the record. I believe that, if we get the process questions right, we will figure out the substance stuff sooner or later.

I am of course grateful for the efforts of the many community members who focus on substance. I appreciate that they add a great deal to our discussions.

What makes community great is that we have different people coming to the same questions from different places. The combined effort is something powerful. When things are working, the community as a whole comes to know things that no one individual community member knows.

I like the guy (Mike) who runs that Oblivious Investor blog. He obviously puts forward his own views. But he does so in an open and good-hearted and warm way. I think that’s key. He reminds me of Michael Kitces in that regard. I believe that these guys may serve as models for the rest of us and lead us out of this darkness.

I am not a big Jim Cramer fan. But I thought that his little tirade shown at that link was an emotionally healthy one. People need to begin holding the Passive Investing advocates to the same standards that apply for all others.

Skeptical as I am, however, I will concede there is a place for international investing from a diversification standpoint. Indeed, I have no hesitancy recommending an international position—say, from 5% of equities to no more than 20%, given the extra economic and financial risks and the ever-elusive ability to forecast the strength of the dollar.

I am always suspicious of index fund claims. They strike me as sorting everything after the fact. They suppress the idea that an active fund manager might shift holdings and allocations over time. They gloss over the objective of a fund, which might include downside protection.

They also gloss over the failings of mutual funds as investments: managers have to focus on the short term to hold their jobs.

Warren Buffett showed years ago that there are superior investors in The Super Investors of Graham and Doddsville (speech at Columbia University). He showed that you could identify them in advance. Yet, diehards still claim that doing so is impossible.

Professor Robert Shiller showed that prices predict long term returns reliably. Yet, too many refuse to acknowledge the obvious.

I am planning an article in which I will list a sample of the inconsistencies in Bogle’s investing recommendations.

I have given up hope of resolving the many inconsistencies. If you read only Bogle’s best statements, he is the best investment advisor out there. If you read only Bogle’s worst statements, he is the worst investment advisor out there. So how can anyone say whether his advice is good or bad. It’s both!

There’s an article at the site in which I compare investing “experts” with politicians. The skill that pays off biggest is being able to say different things to different audiences without getting called on the contradictions.

This is the sort of topic that needs to be explored in more depth. It’s nice to know the numbers. But you never know what the real numbers say unless you know how much spin was applied to the numbers that were reported to you. The amount of spin applied is obviously much greater at times of insanely dangerous prices. So you need to know how high valuations are to know how much to adjust the numbers reported for the spin factor.

Set forth below is the text of an e-mail that I sent to the owner of the Frugal Dad blog on June 3.
Jason:
This is Rob Bennett, author of the "A Rich Life" blog. I hope things are going well with you.
I would be grateful if you would consider the submission below for possible posting at your site as a Guest Blog Entry. In the event that you choose not to use it, I would be grateful if you would let me know so that I can shop it elsewhere.
Thanks.
Rob
The submission was…

Set forth below is the text of a thread-starter that I put to the Goon Central board:
This is tentative. I think I am beginning to make some slow progress in getting the e-mails out.I should have had hundreds of them out by now. I think the number was about 12 through yesterday. For today, I think it will be five or six more. No great leap forward. But small movement in the right direction. My hope is that the next week will be better.I believe that the same emotional roadblocks that…

I recently posted the following words -- titled How Minds Change -- to the Suckers Buy It! forum:
A2DKristi said (in the thread on university courses) that:
I just finished reading the entire “No Trolls Allowed” thread from the SBI forum (I love that people send me this stuff), and believe me, these people worship Ken like he’s the messiah, and talk about me like I’m the devil.
They simply don’t care.
I have lots of personal experience with the phenomenon that you are…

Set forth below is a comment that I posted in response to a comment by a community member named "What" on the discussion thread for the blog entry titled It Breaks My Heart When People Don't Comment on My Investing Posts.
All you did was point out some underlying assumptions and limitations of the study that any educated reader already knew and understood.
No.
I was at the Motley Fool’s Retire Early board in the years when people were putting up threads on a daily basis about…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
No. You are wrong of course.
Those five reasons are what you would like the issue to be. But none of them are the issue.
The issue is the way you behave when interacting with others either by email or or discussion boards.
Numerous people come to the same conclusion independently.
And tell you so.
And you ignore them.
Over and Over again.
I’ll give a slightly different…

Set forth below is the text of a comment that I recently put to a discussion thread at this blog:
Rob,
Since you believe that you are right and everyone else is wrong, you must have a massive net worth by now. Care to share the details?
We all believe we are right, Sparky.
You believe you are right. If you didn’t, you wouldn’t be here.
The difference between me and you is that, while I believe I am right, I ALSO believe that it is possible that I could be missing something…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Hi Rob ,
After learning about Value Investing on your site , before I had been brain washed by my Buy and Hold Broker. I finally learned on my own about Value Investing I will never go back. In fact using your calculator with these insane values I allocated 20% to stocks. Am I glad I did I have still had a decent gain with no worry! If my portfolio looses 80% I am…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
It is so common to see as these leading financial experts threatening people with prison and lawsuits.
It is not common at all to see leading financial experts refer to the need for prison sentences for you Goons, Anonymous. That’s why we are in an economic crisis.
I was a Buy-and-Holder on the morning of May 13, 2002. I gave it up on the evening of August 27, 2002. That’s the night…

I recently posted a Letter to the Editor at www.Early-Retirement-Planning-Insights.com site entitled Michael is Asking Cutting-Edge Questions.
Juicy Excerpt: As we move deeper into a Rational Investing analysis (it is rational to accept that emotions matter), we will be confronting more and more questions that are more psychological than statistical in nature (but in many cases looking at the data will help us come to a better informed understanding of psychological realities). We need to…

I drove my mother to Atlantic City on Saturday. I don't gamble (except in poker games with friends) So I spent much of the day sitting on a bench on the boardwalk writing articles for the web site.
One of them is entitled "Investor Emotions." The article attempts to correlate the emotion with the greatest influence on investor psychology at a given time with the P/E10 value that applies at that time. It's highly tentative stuff. But it's potentially highly significant stuff too.
Our most…

A community member named "James" wrote in an e-mail:
"I just listened to your podcast on Buy-and-Hold Cannot Work. I was referred to it by a friend with whom I have recently been discussing the same concepts.
"What you don't mention in this podcast is the primary basis for the Stay-the-Course concept. As I understand it, the idea is that: The market is smarter than any one individual and automatically prices value effects into itself. Ergo, it's safe to be passive!
"Quite…

Set forth below is the text of a comment recently posted to another blog entry at this site:
Oh, don’t worry! I never said I knew the extent to which valuations might affect future stock prices. Correlation data suggests historically they may have to some extent, some of the time, though correlation doesn’t always mean causation. I’ll be the first to admit that the future’s a very uncertain place. No boorish hocomania here. I focus on the things I can control, like gainful employment…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
It has been 30 years for me. That is long term. My buy and hold strategy has worked just fine. I am now sitting on $2.6 million in diversified holds and adding more to my positions everyday.
Your words say one thing and your actions say another, Anonymous.
Your words say “I’m fine.” Your actions say “I’m worried.”
If you were confident, you…

Many investors acknowledge that we all were feeling greedy back in the 1990s. But now that stocks have performed poorly for over eight years, those days are behind us. The problem today is that, if things keep going like they have been going lately, it is our feelings of fear that will be getting out of control.
Right?
Not right.
Today’s P/E10 value is 25. We are now at one of the highest valuation levels experienced in the history of the U.S. market. Stocks have never given a strong…

I've added Elizabeth's story to the Middle-Class Millionaires section of the site.
Juicy Excerpt: I woke up around DJI 13200, realized I had a lot to learn and had better learn it fast, and found this site. I now have cash sitting in MMFs that has not disappeared out of my retirement funds. I also have much more confidence in my ability to understand what is happening and to respond appropriately as the situation evolves.... I thank you for your public service and, in another dimension,…

Set forth below is the text of an e-mail that I sent last week to my friend Brian. Brian and I became friends during my days as a Capitol Hill reporter. We have stayed in touch in the years since. Brian asked: "If everyone (or the vast majority) has lost money, are we really any poorer?"
Brian:
You're asking a penetrating question. I wish that everyone would take some time and think this one through. If they did, that would help a lot.
The full reality is that there has been no…

I recently posted a Letter to the Editor at John Walter Russell's site entitled Rational Investors Do Not Become Permabears!
Juicy Excerpt: To be a perma-bear is as bad as to be a Passive Investor. The two psychologies are two sides of the same emotional coin. The biggest danger we face today is that millions of middle-class investors are going to become perma-bears because they fell for the Passive Investing gibberish and are now disillusioned with how it works in the real world. Stocks…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Of course, you are an expert at lying, Rob.
All of us humans are, Anonymous.
Have you read Freud? Isn’t projection a form of lying? Are there ANY humans who don’t engage in even a tiny bit of projection (that is, a tiny bit of lying)?
How about Dostoevsky? When his character Raskolnikov killed the old woman, did he not justify doing it by telling himself lies…

Set forth below is the text of a recent comment that I put to the discussion thread for another blog entry at this site:
Does Jeff still talk to you, or was he scared away by the goons as well?
He did not respond to the words of the e-mail set forth above, Critter. That tells the tale.
Jeff is like all the rest of us. He wants to be friends with me because he likes me. That’s why he made contact with me. He finds the idea of the Campaign of Terror absurd, which is why he said what he…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
“PERMITTING HONEST POSTING.”
Can you please define what you mean by that. I am unaware of any topic that has not been discussed.
That’s a good question, Anonymous.
What’s honest for you is not the same as what is honest for me.
You believe in Buy-and-Hold. So you can put up a post saying “a high stock allocation makes sense today” or “there’s no reason to believe…

Sometimes I say things in the heat of the moment just to have something to say and, then later, when I read the words back, they make sense! It sometimes really does happen that way. It makes me wonder if there really is a God or something.
Some Goon was sticking his elbows out at me in comments he put to a recent blog entry and I went into my usual riff about how all you need is love and love is the answer and what the world needs now is love, sweet love, blah, blah, blah, blee, blee. blee.…

Set forth below is the text of a comment that I recently posted to the Goon Central board:
Set forth below is the text of a comment that I recently put to the Goon Central board:
it's just that not enough folks have yet been introduced to your insanity profound insights in order to create a tipping point which will make the Hocomania Wave unstoppable! Yes, it's a Tipping Point thing.
EVERYONE (including you, Yip!) knows that GRQ is garbage. That's close to…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
“We need to overcome you Goons.”
That’s easy. Just delete 100% of the Goon comments (a small increase from your current 90+%.) Since you post nowhere else anymore, the Goons can no longer reach you. Problem solved. Then watch as your fans slowly crawl out from under their beds and start posting honestly here.
If you fail to take this simple step, one has to wonder what your goal…

Set forth below is the text of a comment that I recently posted to the Goon Central board:
Hocus, you've been predicting the stock market (which of course we know on HocoWorld refers solely to the S&P 500 Index) will drop by 65% within three years. I just wanted to establish a firm date, since we know you to be less than truthful after the fact on various issues. Goes with the territory when you're a Habitual Liar like Rob "hocus" Bennett I guess!
I believe you made your…

Set forth below is the text of a comment that I recently posted at another blog entry at this site:
It sure does take this VII a LONG time to work. 15 years now and still vastly inferior returns to anyone using buy and hold. It would take now a greater than 65% drop in equities to even be on equal footing and that doesn’t even account for rebalancing and how much more conservative a persons portfolio would have become over the course of 15 years. VII where you can spend 20 years stashing…

I've seen loyalty. I've seen deception. I've seen friendship. I've seen intimidation. I've seen responsibility. I've seen willful ignorance. I've seen generosity. I've seen arrogance. I've seen courage. I've seen cowardice.
And that's just on internet discussion boards dealing with the topic of stock investing!
It's humans who buy stocks. That rarely noted fact explains why the conventional advice re how to invest for the long term does not work. The conventional advice is rooted in an…

Set forth below is the text of a comment that I recently put to the Investor Junkie blog:
Rob,
I approve comments that make legit counterpoints. I do not know the full history with Early Retirement Forum, nor do I personally care.
His comment is a legit question (though the personal attack is not). If the commentator does not keep it on topic, he will be banned and comments removed (same applies to you also).
Otherwise I do not moderate and allow each to have their own opinion.
I…

A recent Washington Post article argues that: “Humans, no matter how hard we try, act in ways that cause us to make the wrong investment decisions almost all the time.”
I like the lyrics but not the melody to which they are attached.
The guy writing the article describes how he made a poor investing decision. He looked into Behavioral Finance and concluded that his problem is that even the smartest among us are not capable of making good investing decisions, that “when it comes to…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
How do you feel about people you meet who make such enormously boastful (and in this case easily disprovable) statements? Are you attracted to those people? Do such antisocial behaviors earn them many friends?
People don’t like boasting. That’s certainly so.
But those words are required by the job I am doing here, Anonymous.
The Buy-and-Holders are in a trap. When the…

Set forth below is a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
It is a simple question Rob. If you lack sufficient funds to last through your entire retirement, why don't you get a job?
The answer is that the work that I am doing is important work. The fact that I am not able to make money today doing this work is trivial given how important it is that this story be told. I am confident that I will make plenty of money on the…

An earlier blog entry (Do We Like What Comes from Telling Lies to Ourselves re What Our Stock Portfolios Are Worth?) reported on my recent correspondence with my friend Brian. Brian recently sent a follow-up e-mail. The text of my response to the follow-up e-mail is set forth below.
Brian:
Your thought that people often gain more from losing money than from accumulating it is a far-reaching one.
I agree in part but I strongly disagree in part too.
The title of my blog is "A Rich…

Intimidation undermines science.
Intimidation interferes with the reasoning process.
Intimidation causes confusion.
Intimidation turns friend against friend.
Intimidation biases research.
Intimidation can trump logic for a time.
Intimidation causes worry about the long term because intimidation cannot trump logic indefinitely.
The use of intimidation reveals the weakness of an argument.
Intimidation is bad manners.
The desire to make use of intimidation comes from a…

Set forth below is the text of a comment that I recently put to another blog entry at this site:
Buy and Hold is “get rich slowly”
That certainly is how it is promoted, Sensible.And I believe strongly that that is what the people promoting it believe it to be.
And I believe strongly that that is what the people following it believe it to be.
But I do not believe it to be that.
And I don’t say that because of some sort of bias against Buy-and-Hold. I…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
It sounds like it is all one big conspiracy and only you have it completely figured out and exposed.
I have gone farther than anyone else in two departments:
1) Exploring the implications of Shiller’s “revolutionary” (his word) findings; and
2) Using plain, easy-to-understand language re the massive act of financial fraud used to achieve the 34-year cover-up.
Thousands of…

Set forth below are the words of a comment that I recently put to the Goon Central board:
I'm afraid you're going to have to settle for the "cotton candy" money everyone else accepts without question but which you turn your nose up at!
There's a limited sense in which it is so that I have to "settle" for the cotton candy money that many accept without question. I don't need to invest in stocks at times of insane overvaluation. But I am affected by the economic crisis that follows when…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
If you really had a strong case, someone would take it on contingency.
I called about six places and I did not find anyone willing to take it on contingency. There was one fellow who came close. He was a sole practitioner. He loves the case. He wanted to take it. But when he looked closely, he saw how big it was and felt that he would need to put all his waking hours into the case. So his…

Set forth below is the text of a comment that I recently put to the Suckers Buy It! forum:
No one here is trying to convince people not to use SBI.
My thought is that it would be a good idea to give this expression of intent greater emphasis.
I have experience with this sort of thing.
There are people who believe firmly, strongly and without any acknowledgment of doubt that my investing ideas are wrong. They believe this so strongly that they won’t permit other people — who…

Set forth below is the text of a comment that I recently put to another blog entry at this site:
Rob,
Specifically, who are the goons? What makes them goons? Who are the leaders of the goons? Who are the goons that are most responsible for what you see as the problems? Are we talking about a handful of goons or just a small select group? How do I spot a goon?
A Goon is someone who is too filled with hate and fear to have a constructive discussion.
We ALL have goonishness within us.…

Set forth below is the text of a comment that I recently posted at another blog entry at this site:
Didn’t a coach in the Financial Blogger audience tell you that you came across as bitter?
You are thinking of Jaime Tardy, owner of the Eventual Millionaire site.
I talked to Jaime at FinCon13 and told her I would like to hire her for help with spreading the word about Valuation-Informed Indexing. She asked me a number of questions about the VII concept and about my experiences…

What do you know? How do you know it?
You need to know certain things to get from the place where you are when you pull yourself out of your bed in the morning to the place where you are will be when you throw yourself back into it at night. For example, you need to know about gravity. If not for gravity, you would need to dress differently. You might need to wear heavy boots to keep from floating off into space. Gravity matters. Since you know that gravity exists, you keep this reality in…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Well, I’m sure once you provide her (and the rest of us) with evidence of your assertions, she (and the rest of us) will come around.
She came around. She accepts that you Goons did everything that I said you did. But she doesn’t agree with my strategy for dealing with the problem.
She says that I should ignore you. LOTS of people tell me that. My wife tells me that. So I understand…

Set forth below is the text of a comment that I recently put to another blog entry at this site:
You always seem to read everyone’s mind since you know what they are thinking and when they are lying. Perhaps you should have a second career as a mind reader .
Do you not know when politicians are lying to you, Anonymous?
We all do. Give me a break.
Ataloss sent Bill Bernstein an e-mail asking him if he agreed with me that the methodology used in the Old School retirement studies is…

There have been several occasions on which the Greaney Goons have invaded this site and tried to bring the discussions held here into the sewer to which they have pulled discussions held at a number of our Retire Early discussions boards. My reaction? I deleted the posts. In several instances, I banned the posters involved from further participation here.
David Forrest has banned honest posting on safe withdrawal rates at the Motley Fool site. Bill Sholar has banned honest posting on safe…

Set forth below is the text of a comment that I recently put to another blog entry at this site:
Rob, do you think the news about the US handing control of ICANN to the international community will be good for honest posting?
I know next to nothing about it. So it’s not right for me to venture an opinion. The tiny bit I have read about it has been negative.
The one thing that I can say is that it is not procedural issues that are the problem. The published rules at the Motley Fool…

Set forth below is the text of a comment recently posted to another blog entry at this site:
The lack of any supporting comments on this board speaks volumes, Rob. No, people are not afraid to post here as they would be anonymous.
The lack of supporting comments certainly tells us something important, Anonymous. You and I do not agree re what it tells us. But we are 100 percent in agreement that it is a telling reality.
You are of course correct that people are free to post anonymously…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
I don’t know Rob, the ability to make guesses about the future and get them wrong doesn’t seem like a very valuable skill.
It’s not, Anonymous. We couldn’t possibly agree more.
But people have been doing it since the beginning of time, haven’t they?
That’s why I love the idea of rooting one’s strategies in the peer-reviewed research so freakin’ much!
Doing that gets…

Set forth below is the text of a comment that I recently put to the discussion of a blog entry posted at this site:
When is your interview with Psychology Today?
I understand that you are being sarcastic, Sparky.
But an interview with Psychology Today would be 100 percent appropriate and 100 percent wonderful. I look forward to the opportunity to participate in such an interview.
The Buy-and-Holders achieved an amazing advance in rooting their strategies in the academic research. I…

Set forth below is the text of a comment that I recently put to the Goon Central board:
I agree it's entirely possible that the stock market (i.e., the S&P 500 Index) could drop precipitously for any number of "real-world problems, geopolitical turmoil, economic weakness, high unemployment, you name it." There's a quote from Tolstoy that sums up precisely the trouble that you are having understanding how stock investing works, Yip. He said (I am paraphrasing): "There is no concept…

I recently wrote a Guest Blog Entry for the The Oblivious Investor blog entitled Dogma Is the Enemy of the Middle-Class Investor.
Juicy Excerpt: Perhaps I’m wrong. If so, I’d like to find that out. Or perhaps I’m right. Either way, what’s needed today is a national debate on the merits and flaws of the conventional investing wisdom.
A rockin' comments section on this one.
Juicy Excerpt: Does it make sense to pay attention to how much you’re paying for something? Of course…

My wife and I were driving down the road the other day and we passed a Ruby Tuesday restaurant. "What was that song supposed to be about, anyway?" she asked. I said that it was about a hippie-chick who was so unwilling to become tied down by social norms that she refused to answer to any one name.
This got me to thinking about stocks.
Stocks are like hippies in that they are always changing their look. In the last three years of the 1990s, the DOW went up by about 30 percent a year. There…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
I think you have rationalized MANY things in the last two decades.
There’s no doubt but that I have, Anonymous. We all do.
The worst of it is that we don’t see it when we are the ones doing it. We often see it in others but rarely in ourselves.
I wish you all good…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
I guess I will have to wipe away my tears with $100 bills.
$100 bills that have a real, lasting value of $50, according to the last 36 years of peer-reviewed research in this…

Men posters outnumber women posters by a 10 to 1 ratio at the raddr-pages.com discussion board on early retirement topics. Is the financial freedom quest "a guy thing"?
I say "no." My experience with my book has been that women respond to it more strongly than men. My sense is that women and men respond to different aspects of the financial freedom question.
Ask a man if it is a good idea to pay off the mortgage and he is likely to start performing calculations to determine whether he can…

1) When you ask direct questions about things you've seen in the historical stock-return data, all you hear in response are vague references to "efficient market theory" which do not really seem to be responsive to the questions asked.
2) When you raise the possibility that maybe you allowed yourself to get in this thing too far too fast, the glib reply is: "You and me are in this together for the long-term, aren't we, babe?"
3) When you point out that you still don't have a ring on your…

I am a Catholic. That means that I pay regular visits to the confession box.
My guess is that those of other faiths do similar sorts of things. I know that people in 12-step programs occasionally "take a fearless moral inventory." It sounds like it is something along the lines of a whole bunch of trips to the confession box rolled into one.
There are two things about the confession-box experience that just about everybody who goes through it remarks upon. It feels awful going in. It feels…

Set forth below is the text of a comment that I recently put to another blog entry at this site:
None of this is about having information or lacking information, Anonymous. It is about giving in to the Get Rich Quick impulse or reining in the Get Rich Quick impulse.
The Get Rich Quick impulse is risk. There is now 34 years of peer-reviewed research showing that. That research is based on 140 years of historical data. When you give in to the GRQ impulse (that is, when you fool yourself…

Set forth below is the text of a comment that I recently put to the Goon Central board:
Hocus, that a 65% drop is the DEFAULT position is just absurd. Breathtakingly absurd.
Was it absurd that the safe withdrawal rate was 1.6 percent back when I first reported that it was 1.6 percent?
The Nisiprius post at Bogleheads yesterday hit it on the head.
Anything less than 7 percent was absurd in the mid-90s.
Then anything less than 4 percent was absurd after the Old School SWR…

Set forth below is the text of a thread-starter that I put to the Goon Central board:
A lot of people are saying that explanation for Obama's sub-par debate performance is that he was been protected from effective questioning for years by an adoring media.I see the same sort of phenomenon going on with the Buy-and-Holders. They tell each other that they have it all figured out, that everyone is wrong but them. It makes them feel good when they silence those reporting on the last 30…

You hear these guys all the time. They can be highly judgmental.
"Dickens was wrong. These people with their credit-card debt should be put in prison. Thank you, God, for making me so much better than them." That sort of thing.
Then the subject of bull markets comes up. They're doing a happy dance. They're rolling the dice and singing that "Baby needs a new pair of shoes!" It's an entirely different tune.
Huh?
What's bad about credit-card debt? Living on credit-card debt is living a…

I'm excited about a book I've begun reading entitled The Wisdom of Crowds. The Introduction explains in compelling terms both the reasons why the discussion board is potentially such a powerful communications medium and why it is only when reasonable posting rules are enforced in reasonable ways that this communications medium is able to achieve its potential.
Here's the key claim put forward by James Surowiecki (the book's author): "If you put together a big enough and diverse enough group…

Set forth below is the text of a comment that I recently put to another blog entry at this site:
You put things out there that provoke people and then act like a victim.
Did my famous post of May 13, 2002, pointing out the errors in John Greaney’s retirement study provoke people?
It did.
I know because I was there. Lots of people who I consider friends used that study to make decisions as to when to hand in resignations from high-paying jobs and then live only on their savings…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
"I said on the morning of May 13, 2002, that the numbers in the Old School safe-withdrawal-rate studies were wildly wrong. "You Goons said that I must have forgotten to take my meds." Here is a link to the thread in question. http://boards.fool.com/price-adjusted-safe-withdrawal-rates-17209214.aspx?sort=whole and a juicy excerpt or two ” As I read the data, it appeared to me that had I made…

Set forth below is the text of a comment that I recently put to the Goon Central board:
And it's very important to those new folks clicking on your site for the first time imagining it might be a place where they could learn something about the S&P 500 Index market timing scheme you're trying to peddle to watch you rehash all those old comments. At least it won't take them long to realize they're wasting their time if they thought the Plop would be a source of how one could…

Set forth below is the text of a comment that I put today to a discussion thread at the Free Money Finance blog on the topic of the merits or lack thereof of market timing:
Thanks for your kind words and thanks for indeed adding some thoughts that those listening in here very much need to take into consideration, MBTN There's no question (at least in my mind, but I believe that I probably speak for a lot of people re this one) that you are making an important point.
Stock prices can be…

Yesterday's blog entry set forth the text of a post that I put to the Suckers Buy It! forum on the topic of How Minds Change. Set forth below is the text of a follow-up post:
when you’re dealing with people who have a cult like allegiance to a thought or ideal, I guess it’s not such a stretch. Anyway, a belated welcome to the club of Jindiviks (aboriginal for the hunted one).
Thanks for letting me into the club, Jindvick. I think!
The question that I am always focused on (because…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
I’d say once per thread, and on topics related to the thread. There’s no need to repeat yourself. Any assertions should be cited. Keep your responses brief and to the point. And respond politely, and without hyperbole.
Buy-and-Holders repeat themselves endlessly. If I have heard that “timing doesn’t work” once, I have heard it ten-thousand times. If those of us who believe in…

Today's blog entry is a guest post by Arty, one of the best contributors to the Retire Early and Indexing discussion-board communities in recent years. I've read hundreds of articles about our economic crisis. Few have made the key point about the cause of the crash as clearly and succinctly as the words below.
Arty put forward the words as a comment to the blog entry entitled "This Month's Permanent Portfolio," where he also offered dozens of other comments also worth checking…

Set forth below is the text of a comment that I recently put to a discussion of a blog entry at this site:
Say that the Phillies are playing the Yankees in the World Series and that it is the seventh game and that you do a statistical analysis showing that the pitcher they have slated to go is not up to the job. Say that you write this in a column with the aim of persuading the manager to use a different pitcher who according to your statistical analysis is more likely to win the game.
Is…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Yes, I get that you are now 100% fixated on punishing me, rather than pursuing your own goals. If Wade’s paper gets written up in the New York Times, he gets all the glory and rewards. The first step is getting recognized experts like Bengen to acknowledge that he was the first. And that step is checked off. Of course, Wade could wave his hands and say “Shucks no, all this glory belongs to Rob Bennett. He’s the real brains behind any CAPE-based timing strategy.” Yes, that’s the ticket. That’s what will happen. Or you could take two minutes right now to set Bengen straight. Nope, you said that’s not an option. Anytime that anyone writes honestly about what the last 36 years of peer-reviewed research teaches us all about how stock investing works, it benefits each and every one of us who is trying to do the same. There is no limit on the credit that can be handed out. Millions of investors need access to accurate information. Thousands of investment advisers want to give it to them. The thing that is standing in their way is a Wall of Ignorance. People cannot believe the realities — that we now know of a way to invest in stocks that is far less risky and that allows people to retire far earlier in life — because they just sound too good to be true. Anyone who does anything to knock down that wall is helping all of us in a big way. Say that Wade does as you say. I am not saying that I think he would — I do not. But just say for purposes of discussion that he did. That would be an absolute boon for me. If the study that Wade and I prepared gets publicized — regardless of who gets the credit for it — it instantly becomes easier to tell the truth about stock investing at hundreds of different sites. So all of my stuff — I’ve developed a lot of it over the years — gets out. How does that hurt me? You always talk as if the key to getting credit is being smarter than other people. That’s not the reality here. Most Buy-and-Holders possess more than enough […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Uh oh, Rob. Bill Bengen points out the research and data that says you are wrong and that VII is a failure: “I have not studied in great detail the correlation between Shiller CAPE and withdrawal rate. However, Michael Kitces, a celebrated financial planner who has also done some important research in the area of withdrawal rates, produced an interesting chart some years ago. It showed a strong negative correlation between CAPE and each year’s safe withdrawal rates. So, I am not surprised at the conclusion that Wade reached, although I believe he may have been the first to quantify the “boost” to SAFEMAX by using a timing strategy. However, for those who wait for a low enough CAPE to invest fully in stocks, it has been a frustrating 25 years, as CAPE has been below its average of about 16 only about 25% of the time during that span (if that much). Today, of course, CAPE stands at more than twice its long-term average. It will be interesting to see if it does indeed “mean revert”, and even drop below its long term average. The only time that has happened in the last 25 years was for a few weeks in 2009. ” That last paragraph is power-packed stuff, Anonymous. I am grateful to you for sharing it with us. The claim that the last 25 years have been “frustrating” for Valuation-Informed Indexers is true only from the perspective of a Buy-and-Holder. Yes, if we have missed out on gains, then it could be viewed as frustrating. But the entire question in dispute is the question he puts on the table two sentences later when he questions whether prices will eventually mean revert or even drop below their long-term average. If that happens, the math shows that the Valuation-Informed Indexers will be far, far ahead of the Buy-and-Holders, too far ahead for the Buy-and-Holders to entertain any realistic expectations of ever catching up. Do I believe that prices are going to mean revert? 100 percent. I have never been more sure of anything in my life. Could I be wrong? 100 percent. I am one of those darn humans. We get them wrong all the time. All of us do. That includes me. We should […]

I’ve posted Entry #376 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called How Many Bull/Bear Cycles Are Required to Prove That Valuations Matter? Juicy Excerpt: I sometimes make the claim that 100 percent of the evidence available to us today supports Shiller’s view of how stock investing works and 0 percent supports Fama’s view. I of course understand that the statement strikes most Buy-and-Holders as extreme and absurd. But I advance the claim sincerely. It’s that hill-and-valley graphic showing how valuations play out in the long term that persuades me that the case is so strong. The hill-and-valley graphic applies for the entire history of the stock market. And it is logically incompatible with a belief in Buy-and-Hold. A visitor to my website asked me the other day how many times the hill-and-valley pattern has played out. The answer is four times. We came to the end of one bull/bear cycle in the early years of the 20th Century. We came to the end of a second at the onset of the Great Depression. The third ended with the stagflation of the 1970s. And we are presumably nearing the end of the fourth bull/bear cycle in our nation’s history today. Four completions of the cycle was not enough evidence to make the case for my friend. He asked me to get back to him when I can say that the same basic cycle has played out not four times but thirty times. Related PostsValuation-Informed Indexing #270: A Critic of Valuation-Informed Indexing Offers a Concise Case for Why Buy-and-Hold Is SuperiorValuation-Informed Indexing #269: Eight Questions That Should Be Keeping Buy-and-Holders Up at NightValuation-Informed Indexing #260 : Shiller’s Ideas Should Be Treated as Mainstream IdeasValuation-Informed Indexing #267: Take Valuations Seriously and You Will Discover Things That You Were Not Initially Even Seeking to DiscoverValuation-Informed Indexing #258: It Is Critical to Distinguish Returns-Sequence Risk from Valuations Risk When Calculating Safe Withdrawal RatesValuation-Informed Indexing #259: Return Predictions Are Implicit in All Investing Advice

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Hi Rob. Come join us. Love, Robert, Wade, Bill and Michael We’ll all be working together in the days following the next price crash, Anonymous. The only difference is that there will be more human misery if we wait. I vote for us all pulling together today. But you know what? I only get one vote. Others get to decide what others do. So we will have to wait a bit to see how things play out. I naturally wish you all the best that this life has to offer a person. Rob Related Posts “We Will All Be in a Better Place When I Can Go to Any Discussion Board or Blog on the Internet and Post With 100 Percent Honesty and Not Have Any Concern Whatsoever That Intimidation Tactics Will Be Directed At Me. We All Do Our Best Work When We Feel Free to Follow Our Ideas Where They Lead Us As We Further Develop Them. I Want That for Everyone.”“I Have Raised the Possibility of an Amnesty for People Who Have Continued to Promote Buy-and-Hold Because They Once Truly Believed in it and Who Are Suffering Cognitive Dissonance re the Last 34 Years of Research Because It Is Just Too Hard for Them to Accept That They Got Something Wrong. But I Can’t Adopt an Amnesty By Myself. We Have to Get Congress Involved. We Need to Have a National Debate.”“After the Crash, the Floodgates Open. People Will Give Up Their Feelings of Embarrassment and Shame and Become Determined to Get Things Back on the Right Track. At That Point the Owners of the Bogleheads Forum Are Not Going to Be Resisting My Efforts to Take Over. They Are Gong to Be Asking Me to Take Over. We Are Going to Be Friends.”“If I Had the Power to Release You All of Your Prison Terms and Your Civil-Suit Liabilities and Your Various Embarrassments, I Would Do It In Two Seconds in Exchange for Your Willingness to Permit the National Debate That Thousands of Our Fellow Community Members Have Evidenced a Desire to See Proceed.”“Shiller Showed Us That It Is Primarily INVESTOR EMOTION That Determines Stock Prices, Not Economic Developments. So We All Need to Make a Switch to Talking Primarily About Investor […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: http://www.aaii.com/journal/article/insights-on-using-the-withdrawal-rule-from-its-creator#comments Bengen is asked about and comments about Wade, Shiller, Michael Kitces, FIRECalc, CAPE. There’s even a link to one of Wade’s papers (sadly, not the one you wrote.) This is an active comment thread, so there’s no excuse for you not jumping in. But you don’t. How can you just sit on the sidelines? You say you have the most important job in the world. This is right in your freakin wheelhouse. If you stay silent now, then obviously nothing will ever rouse you from your hibernation. I’m grateful for the link, Anonymous. I have commented at hundreds of places. The problem is certainly not that I have not commented enough. We have a problem as a society. Shiller provided us the last piece of the stock investing puzzle in 1981. Had he published his “revolutionary” (his word) research findings in 1961, there never would have been any Buy-and-Hold. But it didn’t happen that way. By the time Shiller showed that valuations affect long-term returns, we already had an entire industry built around Buy-and-Hold. All of the powerful and wealthy people who were making their living promoting Buy-and-Hold did not want their clients and readers and friends to realize that they had made a mistake. So they kept quiet about the far-reaching implications of what Shiller had done. They praised him, they patted him on the head, they patronized him, down the road a piece they even awarded him a Nobel prize. But they didn’t change any of their strategic recommendations to reflect his research findings. And, as time passed, it became harder and harder for them to acknowledge their mistake and thereby bring the cover-up to an end. It’s now been 36 years. It’s now not just hard to admit the mistake, as it would have been in 1981. It’s now very, very, very, very hard. I did not cause any of this. I came along in 2002, when I saw that Greaney got the numbers wrong in his retirement study and told my friends at the Motley Fool’s Retire Early board. Hundreds of them saw right away how important that post was. They said that I had started the most important discussion ever held in that board’s history. Greaney threatened to kill family […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. …The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts” And don’t you think it’s a wee bit presumptuous to claim you know the inner working of the minds of thousands of people you’ve never met, many of whom you agree are far more intelligent and experienced than you are? I’m intelligent enough to see that there is no valuation adjustment in the retirement study posted at Greaney’s site, Anonymous. And I am intelligent enough to know that Shiller’s research showing that valuations affect long-term returns must be legitimate research or else he would mot have been awarded a Nobel prize for it. I am intelligent enough to know that there is no place for death threats in discussions of stock investing. And that there is no place for demands for unjustified board bannings. And that there is no place for thousands of acts of defamation. And that there is no place for threats to get an academic researcher fired from his job. If you have a better explanation for the events that we have seen transpire over the past 15 years, I would be happy to hear it. Neither you nor anyone else has even tried to put forward a better explanation. So, no, I don’t think it’s presumptuous at all. These events demand an explanation. And there is an explanation available in the psychological literature — cognitive dissonance. So that’s the one that I am going with until I hear something better. You don’t have to accept my explanation if you don’t care to. You asked me a question and I gave you an honest response. My explanation is 100 percent sincere. I am as intelligent as I am, no more and no less. And that’s what I have come up with at this point in the proceedings. I look for new insights every day. So perhaps down the road a bit I will be able to add some detail to it. My best wishes. Rob Related Posts“At the Very Bare Minimum, We Need to Make It a Practice to Tell Both Sides of […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “Stocks are today priced at two times fair value.” To be clear, this is a fact Wall Street is not aware of – otherwise they would immediately dump stocks. Is that fair to say? You are making a great point here, Anonymous. If you would reflect on this point a bit, the entire matter would click for you. Just about everybody on Wall Street is aware intellectually of what the P/E10 level is today. You see it mentioned all the time in articles. These people are obviously not dumb. So on an intellectual level, they know what they need to know. But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. They rationalize away this knowledge that they possess. They tell themselves “oh, nobody knows when the crash is coming and I cannot afford to miss out on gains in the meantime” or whatever. The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts on all of the various strategic questions and so it is as if the knowledge did not exist. It is passive knowledge. It is not being put to productive use. It helps to remember what happened in the famous psychology experiment from the 1950s, the Asch experiment. People were put in a room and asked to identify which of two lines — a 12-inch line and an 18-inch line — were longer. Their brains possessed all the knowledge needed to supply the correct answer. It was obvious to them that the 18-inch line was longer. But the four people who were plants and who spoke before them all identified the 12-inch line as longer. This psychological reality neutralized the knowledge they possessed. Humans are social creatures. Evolution put something within us that tells us “don’t go against the tribe no matter what your brain tells you.” So they told the person conducting the experiment that they “thought” the 12-inch line was the longer one. Their emotions cancelled out the product of their mental processes. All of these people on Wall Street “know” what it means to say that stocks are priced at two times fair value, Anonymous. But their emotions — their […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Rob, It’s the same old thing, people think the party will never end. until it does. I have a friend who retired with $1million cash, his advisor told him to put it in the market in 2008. Well after a 60% loss he sold I guess anyone would. After this his advisor suggested going back in with the rest to “make his money back stocks, are cheap”. Well after all the dust settled he was left with $150,000. He cant go back to work and now he lives on SSI and depression. I myself have only 10% allocated to stocks now. Until you live through this or know someone who has you dont get it, the goons don’t because they cant be wrong. What really bothers me is the “common knowledge” that markets ALWAYS comes back? Really? all advisors say this, It is in all the financial articles on the web. I know I can’t remember the dates, but 7, 15, 20 years to recover. in the past,I for one do not want to sit and wait in fear hoping the market will come back for the rest of my life. Thank you for working so hard to get the word out, some of us get it Rob. Am I trying to get the word out or am I trying to learn myself? I think that the bottom line here is that I am trying to learn myself. There’s a message that I push. But, when you boil it all down, that message is: “Not one of us knows as much as he thinks he does, so we should all be willing to hear the other fellow out and learn what we can from someone coming at things from a different perspective.” That’s a process that serves us well in our efforts to learn in all other fields of human endeavor and it seems to me, that given how important investing is, it makes sense for us to apply the same learning process there that works in every other other field of human endeavor. Thanks for stopping by, Max. Non-Dogmatic Rob Related Posts“Part of the Job is to Describe the Pressures that Caused so Many Generally Good and Smart People Either to Participate in the Cover-Up […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “It’s his abusiveness.” Really? Here are just a few of your quotes from those pesky Post Archives. “The “4 percent rule” has caused millions of busted retirements” “When you calculate the SWR accurately, you find that the withdrawal rate that is described in the Old School studied as “100 percent safe” has only a one in three chance of working out for those who retired at the top of the bubble. That means that there are going to be millions of busted retirements resulting from just this one error” “I think the Old School safe withdrawal rate studies caused millions of busted retirements by getting the numbers so wildly wrong.” “There are going to be millions of busted retirements resulting from the demonstrably false claims put forward in the Old School safe-withdrawal rates studies.” There’s no conflict between those statements and what I am saying here. The 4 percent rule will have caused millions of failed retirements in the days following the next crash (we obviously will not have any problem if it turns out that the last 36 years of peer-reviewed research is not legitimate research). Who is responsible for those millions of failed retirements? If it was all a mistake, no one was responsible. If it all was a mistake, then we all just have to be careful not to repeat the mistake. But that’s not the situation that we are dealing with. I pointed out the mistake in a post that I put to the Retire Early board at the Motley Fool site on the morning of May 13, 2002. Thousands of our fellow community members expressed excitement over the post, saying that they saw it as the most valuable post in the history of the board. Big-name experts like Rob Arnott endorsed the post, saying it checks out with what the last 36 years of peer-reviewed research says in every way and that it opens up the way to hundreds of big advances in our understanding of how stock investing works. A fellow with a Ph.D. in Economic saw how excited people were over the things they were learning in the debate that followed the post asked me if I would be willing to co-author research showing that this post led us […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “I believe that Greaney has caused millions of failed retirements.” Exactly how? You’re still waffling on that. If it’s his 4% rule you should forget about nobody Greaney and focus on famous Bengen, who says 4.5%. If Greaney busted millions of retirements, Bengen certainly busted billions. If it’s Greaney’s abusiveness, how does his abuse bust the retirements of millions of people who never heard of either of you? It’s his abusiveness. Greaney didn’t come up with the 4 percent rule. He is not responsible for the intellectual mistake. I don’t think it would be fair to blame the people (like Bengen) who ARE responsible for the intellectual mistake for the millions of failed retirements. People made mistakes. That’s just one of those things. There is no evidence that the mistake was intentional, that the aim was to cause millions of failed retirements. So I don’t see that there is any blame to cast there. Greaney’s abusiveness IS intentional. That’s why I cast blame on him in a way that I do not cast blame on Bengen or lots of others. You suggest that Greaney’s abusiveness has not hurt the millions of people who have never heard of him or me. I disagree. I built the Retire Early board at Motley Fool into the #1 discussion board at that site with a purpose in mind — I wanted to teach millions of people how to achieve financial independence early in life. It was my intent to spread the word about what we learned about safe withdrawal rates to everyone on the planet. Greaney blocked that process from moving forward with his criminally abusive behavior. Wade Pfau and I intended to work together to get our grounds-breaking study showing that Valuation-Informed Indexing is superior to Buy-and-Hold featured on the front page of the New York Times. Greaney stopped that from happening by threatening to get Wade fired from his job if he continued doing honest work in this field. He destroyed millions of middle-class lives with that criminal act. Has anyone ever been more deserving of a long prison sentence? Valuation-Informed Indexing is a pure good. It’s all upside and zero downside. And millions of middle-class people who very much need access to honest and informed reports of […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Just because you were able to browbeat Wade into emailing the Trinity guys doesn’t mean I’ll do your bidding too. Set up your own damn forum. But I promise I’ll read the historical transcript. Okay. Related PostsGoon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“Part of the Job is to Describe the Pressures that Caused so Many Generally Good and Smart People Either to Participate in the Cover-Up or at the Minimum Tolerate It. I Post These Goon Conversation Blog Entries to Help People Come to a Full Understanding of What Happened.”“Wade Pfau Never Wrote Any Words of That Nature Until You Threatened to Send Defamatory E-Mails to His Employer. Words That Are Said As the Result of Intimidation Tactics Don’t Count. Wade Said What He Really Believes About Safe Withdrawal Rates and About Valuation-Informed Indexing and About Me in Hundreds of E-Mails That He Exchanged With Me, Many of Which I Have Reported on at My Site.”Rob Bennett to Wade Pfau: “It is 100 Percent Wrong That People Posting at Bogleheads Feel Intimdated re Posting My Name…. By Using My Name, You Help Others Get Over Their Feelings of Intimidation”“After the Crash, the Floodgates Open. People Will Give Up Their Feelings of Embarrassment and Shame and Become Determined to Get Things Back on the Right Track. At That Point the Owners of the Bogleheads Forum Are Not Going to Be Resisting My Efforts to Take Over. They Are Gong to Be Asking Me to Take Over. We Are Going to Be Friends.”Buy-and-Hold Goon to Rob: We Have Only Your Word That Wade Ever Said That, or Ever Even Mentioned VII By Name. He Certainly Says Nothing of the Kind Today. In Fact, To You, He Says Nothing At All.”

Set forth below is the text of a comment that I recently put to the discussion thread for another blog entry at this site: “I think Bengen is wrong. I think that I have a responsibility to say so.” And so you do. Here, behind his back. But you won’t express your math-free gut-feel opinion in a comment section where he might see it. How is that living up to your responsibility? No. I engaged in an e-mail conversation with Bengen a number of years back. I told him that I think he is wrong re safe withdrawal rates. Set up a debate at the Bogleheads Forum. We can have Bengen there. We can have me there. We can have Bogle there. We can have Shiller there. We can have Greaney there. We can have Linduaer there. We can have Pfau there. See how it goes. No death threats. No demands for unjustified board bannings. No thousands of acts of defamation. No threats to get academic researchers fired from their jobs. We’ll make history. Rob Related PostsGoon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“We Should Be Asking Bogle Where He Got That Number If He Did Not in Fact Pull It Out of His Backside. Since He’s Available at the Bogleheads Forum and Appears at the Annual Meeting, That’s the Perfect Place to Put Him on the Hot Seat.”Buy-and-Hold Goon to Rob: “I and Many Others Are Confident in Buy–Hold-and-Rebalance. You Seem to Be the Only One Confident in Valuation-Informed Indexing.”Goon Poster at Value Walk Site: “All One Needs to Do Is Read Your Posts and See That the Vast Majority of Your Posts Include Complaints About What You Think of Shiller, Bogle, Pfau and Others. You Want to Talk About Taking People Down, Down, Down. Just Read Your Own Posts.”“Most People Who Agree With Shiller Hold Back From Exploring All the Implications of His Ideas Publicly. That’s Why Valuation-Informed Indexing Has Only Won Over 20 Percent of the Population in 34 Years. I Want It to Win Over 100 Percent of the Population. So I Say Things in the Way in Which They Must Be Said for Us to Get to 100 Percent.”“It’s ALL a Guide. But You Buy-and-Hold Goons Don’t ACT Like It’s All a […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: It makes perfect sense. You despise Greaney. You just won’t say that, so you blindly attack his work. Do you know how many Google hits there are out there for “rob bennett” “millions of busted retirements”? Lots. And the cause of all those busted retirements? The 4% rule. Now, magically, you have no problem with it. 4%, 4.5%, whatever, it’s all good, let’s just get along. Today you say “Greaney has destroyed millions of middle-class lives with his insanely abusive behavior.” Which is absurd, but it clearly shows your problem with him is personal. Until someone says it’s personal. Then the problem is back to the 4% rule. I don’t despise John as a person even a tiny bit. I had a lot of good times with the guy. I never would have had those times if he had not started that Retire Early board. When I was starting work on the book that became “Passion Saving,” I asked John to be my co-author. Why would I do that if I despised him? This claim makes no sense. And it’s not right to say that I blindly attack his work. I reviewed his retirement study when he published it as a report at the Soapbox.com site. I gave it a five-star review. I felt a little funny about doing that because I knew at the time (but had not come out publicly and said so) that he got the numbers wrong in his study. I rationalized what I did on grounds that his study was a significant advance on the retirement literature that was in place before he came on the scene. I still believe that to be the case. Peter Lynch was the manager of the Magellan fund. He was a pretty big deal. Lynch said that the safe withdrawal rate was 7 percent. Greaney said it was 4 percent. Greaney was a lot closer to the mark than Lynch was. Not bad for a guy whose only qualifications to write about the subject were that he (like me) had figured out how to get his words posted to an internet site. So I like the guy as a person and I admire his work. But, yes, you are right that I believe that Greaney […]